Report: Sirius XM Rate Hike Upsets Subscribers

RADIO ONLINE | , , | :am CT

Sirius XM is preparing to raise its subscription fees this week, to cover what the satcaster says is an increase music-royalty fees. The Columbus Dispatch says that some are speculating that the hike is based on royalty fees and the move is "an end run" around a FCC ruling when Sirius and XM merged last year.

In a letter to subscribers, Sirius said that beginning Wednesday, it would charge a "music royalty fee of $1.98 per month for primary subscriptions and 97 cents per month for multi-receiver subscriptions effective on a subscriber's next renewal. The fee will be used "directly to offset increased payments from XM to the recording industry" said Sirius XM.

When Sirius and XM merged in 2008, the combined companies voluntarily capped its basic subscription package at $12.95 a month over concerns that the merger would lead to higher prices. The only exception is that the satcaster could pass along some costs associated with music royalties. However, Sirius XM's $1.98 rise in the basic monthly rate of $12.95 represents a 15%, almost twice the 8% the FCC approved.